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Severstal to buy Canada's Sacre-Coeur Minerals
30.09.2010 15:04
www.miningweekly.com
23rd September 2010
Russia's largest steel producer, Severstal agreed to buy Canada's Sacre-Coeur Minerals Ltd to boost its mining operations in Guyana in a deal that values the gold explorer at about C$65 million, sending Sacre-Coeur shares to a two-year high.
Severstal offered to buy the shares it does not currently own in Sacre-Coeur for C$1.60 per share, which is a premium of 43 percent to Sacre-Coeur's Tuesday close of C$1,12 on the Toronto Venture Exchange.
Severstal refused to disclose the stake it currently holds in the company. Sacre-Coeur, which has a market cap of C$43.7 million, was not available to comment.
Sacre-Coeur, which has an interest in about 1,000 square km of mineral properties in Guyana, said it has agreed not to solicit or accept any competing offers.
Sacre-Coeur has agreed to pay a termination fee of C$2.75 million.
Earlier in the day, Severstal outlined plans to list its gold unit on the London Stock Exchange that would value the business at around $4 billion.
Severstal is now looking at gold to offset declines in its recession-hit core steel operations, and has been steadily acquiring gold assets in Africa and Russia. Sacre-Coeur, which is also engaged in exploring metal and diamond properties in South America, said a special meeting regarding the offer is expected to be held in November.
The deal is expected to close within three business days after that.
Sacre-Coeur shares were up 38 percent at C$1,54 Wednesday afternoon, its highest in more than two years.
Severstal shares, which have gained more than 25 percent in the last three months, were up 2 percent at 436.69 roubles Wednesday afternoon.
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